Finance Ministry adjusts tax rates for two milk fats

Updated: 09:42’ - 18/01/2016

The Ministry of Finance said it had adjusted the preferential import duty rate of five percent for anhydrous butter fat (ABF) and anhydrous milk fat (AMF), two different kinds of materials for processing milk products, in the preferential import tariff for 2016.

In an official letter sent to the Prime Minister, the ministry said the import duty rate of 15 percent for such materials used in production was too high and unreasonable against finished milk products with import duty rates of between 5 and 7 percent and imported yogurt with import duty rate of 10 percent.

Eight dairy firms appeal against huge tax arrears__Photo: Internet

The products have the same composition, the same utility and are used interchangeably but are subject to different import tariffs, the ministry noted.

On November 25, 2015, eight diary firms on the domestic market, including Vinamilk, NutiFood and Vietnam-Dutch joint venture FrieslandCampina, sent a letter to the Prime Minister and the Ministry of Finance to complain that the General Department of Customs had ordered its local offices to collect taxes from the businesses for AMF, totaling up to VND 1 trillion dating back to 2010 because the customs office insisted that ABF and AMF are two different products.

These firms argued that despite different names, ABF and AMF were the same product with similar contents, citing scientific documents released by local and international organizations.

For many years, these firms declared the two products under the same sub-heading of 0405.90.10 with an import duty rate at 5 per cent.-(VLLF)